"We are the only country in the world that has made this commitment to take responsibility for animal welfare along the supply chain," she said.

"Over 100 countries around the world export livestock, but only Australia has put in place a mechanism along a supply chain to control that supply chain."

But Mr Joyce defended the supply chain safeguard.

"We have designed a system to try as much as we can to deal with this issue, so Australian sheep are not treated in this way," he said.

"What we also have to make sure is we don't overreact, there is a continual monitoring process, a process that deals with it."

Mr Joyce told a conference of beef and sheep producers and exporters in Townsville this morning that the Government will scrap an independent animal welfare supervisor position which was promised by the former government to monitor the humane treatment of live exports.

Mr Joyce says the position was an unnecessary layer of bureaucracy and his department will take over the task of implementing government policy on live exports, including the operation of the Export Supply Chain Assurance Scheme (ESCAS), previously overseen by the Inspector-General of Animal Welfare.

Thousands of animals sold outside welfare assurance system

The animals' distinctive appearance and ear tags identifying the farms some came from prove they are Australian, and several local people tell the Animals Australia activist on camera that the sheep are Australian.

The Department of Agriculture confirmed the sheep were Australian, but would not comment further.

The vision was shot during the festival of Eid Al-Adha, when many Muslims celebrate by slaughtering sheep and sharing the meat with the poor and needy.

Animals Australia's Lyn White told Lateline she saw more than 10,000 Australian animals being sold outside the system at 32 different locations during the two days she spent shooting the footage.

She said she also saw Australian sheep being sold at 26 outlets in June, and reported this to the Department of Agriculture.

"I believe that the Department actually instigated an investigation into these and considered them serious breaches," she said.

"It's the failure of the exporter to respond that I think has shocked the Department of Agriculture and the industry itself, who know that what is absolute contempt for the regulations is completely contrary to the interests of the industry, let alone to the interests of Australian animals."

The company said the treatment of the animals was "unacceptable" and pledged to investigate how the sheep ended up being sold individually and slaughtered in the street.

The company also said it would cooperate with the Department of Agriculture's investigation into the matter, and claimed it had asked the Jordanian government to confiscate any Australian animals found "outside the supply chain" so it could determine their point of origin.

Wellard, the only other Australian company that exports live sheep to Jordan, said it had not exported any of the sheep in the footage.

"Wellard has viewed the footage and none of the sheep pictured were supplied by Wellard to our Jordanian customer," the company said in a statement.

"In addition, a post-Eid Festival ESCAS audit conducted by an independent, accredited auditor, and the reports from the large team Wellard sent to Jordan to assist our client with animal welfare, both indicated that our client's supply chain remained robust and that animal welfare was maintained."